President Donald Trump has reportedly asked aides to find a way to weaken the U.S. dollar in an effort to boost the economy ahead of the 2020 presidential election.
president also asked about the greenback while interviewing Federal Reserve
Board nominees Judy Shelton and Christopher Waller, people familiar with the matter told Bloomberg News.
individuals also told Bloomberg that Trump’s chief economic advisor, Larry
Kudlow, and Treasury Secretary Steven Mnuchin disapprove of the idea of
government tampering to weaken the dollar. Traditionally, past administrations
have always maintained publicly they were for a strong dollar because dollar
assets like Treasuries are so widely held around the globe.
Trump has often bemoaned the relative strength of the
U.S. dollar in foreign exchange markets, blaming other nations for devaluing
their currencies and thereby inflating the American trade deficit. Last week,
the president said in a tweet that the U.S. should match China and
Europe’s “currency manipulation game.”
and Europe playing big currency manipulation game and pumping money into their
system in order to compete with USA,” Trump said on Twitter. “We should MATCH,
or continue being the dummies who sit back and politely watch as other countries
continue to play their games - as they have for many years!”
A strong dollar tends to give American
consumers an advantage when purchasing foreign goods but can hurt domestic
exporters as other nations are forced to shell out larger sums for goods produced
in the U.S. That’s proven a headache for Trump, who’s made reducing the U.S.
trade deficit a priority.
questioning of Shelton and Waller come after months of White House attacks on
the Fed and its hesitation to cut borrowing costs, a move that would reduce the
value of the dollar as investors look for higher interest rates elsewhere.
executive vice president at the St. Louis Federal Reserve bank, reiterated to
the president that central bankers don’t factor the strength or weakness of the
dollar when setting interest rates and instead monitor inflation and
employment, Bloomberg reported. The value of the dollar is not part of the
Fed’s dual mandate given to the central bank by Congress.